“Greggs predicts living wage will drive up pasty prices in 2016” seems to be the loudest moan of discontent among businesses at the government’s recent announcement that it intends to make a living wage the minimum wage. Costa, and owners Whitbread, have also threatened “selective price increases” in response, suggesting the hungry consumer will foot much of the higher wages bill so it doesn’t eat into profits.

This year’s Living Wage Week kicks off on 1st November heralding the new living wage rate for in and outside London. According to the Living Wage Foundation, it’s when “accredited Living Wage Employers across the country celebrate their commitment to the Living Wage”. This year’s will undoubtedly gain extra interest on account of the government’s appropriation of the principle of a wage based on a decent standard of living for workers, currently set at £9.15 in London and £7.85 elsewhere. It will also coincide with the launch of new projects to support low paid workers towards better waged jobs.

In his first Tory-only budget in July, George Osborne pledged his intention to make the minimum wage at least a so-called living wage, although he stopped well short of the rates already calculated by campaigners and accepted by over 1,800 employers. Pre-empting the responses of businesses like Greggs and Whitbread, Osborne said: “The OBR [Office for Budget Responsibility] today say that the new National Living Wage will have, in their words, only a “fractional” effect on jobs.They say that by 2020 there will be 60,000 fewer jobs as a result of the National Living Wage but almost 1 million more in total.

“They also estimate that the cost to business will amount to just 1% of corporate profits. To offset that I have cut corporation tax to 18%. To help small firms I will go further now and cut their national insurance contributions.”

Rhys Moore, director of the Living Wage Foundation, said he was “delighted” with the Chancellor’s announcement but pointed out the levels were less than the established rate of a fair living wage: “Is this really a Living Wage? The Living Wage is calculated according to the cost of living whereas the Low Pay Commission calculates a rate according to what the market can bear. Without a change of remit for the Low Pay Commission this is effectively a higher National Minimum Wage and not a Living Wage.” He also called for a rethink on rates specifically for London and on pay levels for the under-25s.

Beyond looking at the living wage in isolation, other critics are less welcoming of the Chancellor’s announcement, claiming the cuts to welfare and, in particular, Working Tax Credits virtually negate the benefit of an increased minimum wage. Reported in the Guardian, Adam Corlett, economic analyst for the Resolution Foundation, said: “While the chancellor’s new wage floor will give a welcome boost to millions of Britain’s lowest-paid staff, it cannot guarantee a basic standard of living or compensate for the £12bn of welfare cuts that were announced alongside it.”

There are signs that competition will grow among employers wanting to attract decent staff. When Lidl recently announced they would raise workers’ hourly wages to exceed the Living Wage at £8.20 per hour (£9.35 in London), Sainsburys quickly pointed out Lidl’s other employment policies were far from perfect, refusing to pay staff for time spent on breaks, for example. Jobseekers may want to look deeper at terms and conditions than the headline rate of pay but for Lidl at least, the estimated £9m cost is more than covered by the boost to its reputation and one week later, Morrisons followed suit, while the Guardian reported that Tesco expected "Osborne's" Living Wage "will cost it £500m by 2020".

In London, six organisations have won funding to work with low paid workers to help them progress to at least living wage jobs. Step Up is an initiative jointly funded by Trust for London and the Walcot Foundation. Among the charities setting up a two-year programme is homelessness charity Thames Reach who also run the Employment Academy in Peckham. "Step Up is what we're calling 'the Upwardly Mobile Network' for working people on low wages," says Catherine Parsons, Operational Support Manager. "It's a scheme we're leading on in London, primarily Lambeth, where we'll be inviting people to become members and receive information about better paid jobs and training so people can move to the next rung on the employment ladder. The idea is to help as many people into Living Wage positions as possible. It's a bit like a professional development programme but for non-professional people, using text messaging and events, instead of email and LinkedIn.

"Thames Reach has been running the Employment Academy in Peckham since 2012, supporting one of our aims to support people into fulfilling lives. Helping those we've helped there into work, as well as anyone else who might have started at the bottom of the jobs ladder, to improve their working lives fits with our vision for the Academy. We don't believe the journey for jobseekers ends with finding a job. They usually have aspirations to do the best for themselves and their family, so it's an ongoing process."...

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Quids In Professional Network (QIPN) - Special Reports

QIPN is a network of almost 2,000 professionals working with people in poverty, on low incomes or who are financially excluded. It produces a free monthly e-newsletter to share analysis, good practice and news on issues affecting members. Sign up here.QIPN is run by the Social Publishing Project, a self-funding social enterprise that produces Quids in magazine and its website.